The National Treasury is in the market seeking Sh50 billion from the sale of three reopened bonds this month.
The bonds on auction are a three-year, 10-year bond and a 20-year paper which were first auctioned earlier on different dates. The three-year bond was first sold in April when its coupon (interest) rate was recorded at 11.76 percent.
The 10-year security was initially auctioned in 2019 when its average rate came in at 12.3 percent.
The 20-year paper first set a coupon rate of 13.44 percent last year.
The three securities are on sale until August 16. The shorter-dated paper has 2.7 years to maturity, while the 10- year and the 20-year bonds have 6.7 years and 19.1 years to redemption respectively.
Last month, the National Treasury exceeded its target for the Sh60 billion bond auction by taking up an extra Sh19.9 billion in the first bond sale of the new fiscal year, taking advantage of high investor appetite for the offer that was sold amid ample liquidity in the market.
The new auction comes a week before the general election on August 9, an event that has seen increased investments in safer and liquid assets such as fixed bank deposits and government debt securities as investors adopt a wait-and-see stance.
Major investors in treasuries have been pushing for higher rates amid rising inflation and the weakening of the shilling against major world currencies.
The cost of living measure rose to 8.3 percent last month, driven by escalating prices of food and transport services. Inflation is the biggest threat for fixed income investors, eroding the value of the interest they receive over the period during which they hold the assets.
Institutional investors led by banks, pension funds, and insurers have higher bargaining power and usually state the interest they want to be paid, while most small investors typically settle for the market average.
The market average is largely influenced by the bids from the big investors who dominated the treasuries market.